Intra-EU energy arbitration after Komstroy

The change began with Achmea. In that case, the Court of Justice of the European Union (CJEU) held that investor-state arbitration under an intra-EU bilateral investment treaty was incompatible with the autonomy of EU law. In Komstroy, the Court extended that reasoning to Article 26 of the ECT. It held that Article 26 could not apply to disputes between one member state and an investor from another member state, because such disputes may involve the interpretation or application of EU law by a tribunal outside the judicial system established by the EU treaties.

As a result, the EU and Euratom withdrew from the ECT with effect from 28 June 2025. A 2026 agreement on the interpretation and application of the ECT records the participating parties’ common understanding that Article 26 of the ECT cannot, and never could, serve as a legal basis for intra-EU arbitration proceedings, and the ECT sunset clause does not produce legal effects in intra-EU relations. 

The pursuit of intra-EU ECT claims will therefore have to be weighed against a difficult jurisdictional and enforcement landscape. Respondent member states are likely to raise intra-EU objections before the tribunal, and any award may face annulment, set-aside, or enforcement challenges depending on the arbitral rules, the seat, and the forum in which recognition or enforcement is sought. 

Energy-transition disputes will continue to arise, particularly where regulatory change affects long-term projects. One wonders whether greater attention is likely to be paid to contractual protections, domestic remedies, and insurance, than to the pursuit of intra-EU investor treaty claims for such disputes. 

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John Gaffney is a partner at Beauchamps LLP, Dublin, practicing in EU and competition law, ESG, and international and domestic arbitration. He is an Adjunct Professor at University College Cork and Co-Chair of the European Law Institute Dispute Resolution SIG.